Casual Dining’s Death Spiral?
Another month and another round of Medical Examiner Reports for the Casual Dining segment of the restaurant industry. As interested and invested industry observers we trail-along to learn where the industry is trending regardless of the segment; however, casual dining has recently been examined by more than one publication for a preliminary post-mortem. It wouldn’t be “business as usual” if we didn’t chip in our two-bits as well.
First, let’s review some recent industry “headlines” to begin our conversation:
- Restaurant traffic slowdown only beginning, 10/4/16
- Ruby Tuesday sees comparative sales slip, 10/6/16
- Industry same-store sales fall again in September, 10/21/16
So the focus here is on casual dining’s falling/lagging/slipping sales (pick your word of choice); however, the current situation may be beyond a menu refresh or unit remodel.
While corporate “chain” restaurant management performed admirably over the past few decades honing their “P&L” skills to the satisfaction of their shareholders they may have overlooked the satisfaction of their guests?! Combine that possibility with the change in demographics (Millennials surpass Boomers; Washington Post, 4/26/16) and the slow downward sales trend for casual dining becomes apparent. Operators need to continually review the hospitality landscape to understand where the consumer is driving the business.
We observe that smaller restaurant groups and independents understand the need to stay focused and on the leading edge of food, beverage and service trends as the population changes, so does their demand for goods and services. They are more flexible and can move faster than the 1,000+ units chain operations. Chains have the advantage of resources due to their size; however, the “millennial” consumer is driving the market forward in an SUV, not their parents’ mini-van.
Understand Millennials lifestyle and you’ve taken the first step toward capturing their attention and meeting their needs. As a group they are “on the go” and require convenience which can be found on their smartphones so your site must be “phone-friendly”. They seek healthy menu options (especially the Mom’s) and a clean atmosphere. While value on the menu is important, high on their list is giving back to the community. This group also seeks a unique restaurant that serves authentic food which for a highly “commodity-leveraged” casual dining chain is a throwback to their decades-old business model.
Sitting down for a meal just isn’t in this groups time-frame as they’ll sit down at home and cook a meal (think meal kits delivered to your doorstep) before they sit down in a restaurant. The type of concept they seek is the independent and cutting edge, want proof? In our state (Florida) of the over 1,200 new restaurant openings since mid-April, 2016 over 65% have been independents suggesting an answer to market demand. For additional market insights regardless of the restaurant segment contact us at www.themenuspring.com .